Barclays fined £38 million for risking client assets

25 September 2014

Barclays Bank has been fined £38 million for risking £16.5 billion worth of client assets.

The Financial Conduct Authority (FCA) has fined the banking giant an exact amount of £37,745,000 for failing to properly protect clients’ custody assets, which resulted in heightened risk that clients would incur extra costs, lengthy delays and even lose their assets should Barclays have become insolvent.

FCA Director of Markets David Lawton commented: ‘Safeguarding client assets is key to maintaining market confidence if firms fail - Barclays lack of focus on the rules was unacceptable. Our on-going scrutiny of firms’ compliance reflects the importance of the regime, which protects custody assets worth £10 trillion held in the UK.’

FCA director of enforcement and financial crime, Tracey McDermott said: ‘Barclays failed to apply the lessons from our previous enforcement actions, numerous industry-wide warnings, and exposed its clients to unnecessary risk. All firms should be clear after Lehman that there is no excuse for failing to safeguard client assets.’

This is the largest fine ever imposed by the FCA or its predecessor the FSA for client assets breaches – it is a reflection of ‘significant weaknesses’ in the systems and controls in Barclays’ Investment Banking Division between November 2007 and January 2012 and the number of affected accounts.

Barclays agreed to settle at an early stage, qualifying for a 30% discount. Without this, the FCA would have imposed a penalty of £53,921,619.